Sjarifudin wants corn import tariffs raised

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsjah said yesterday he had asked the minister of finance to increase the tariff on corn imports in a bid to protect domestic corn producers.

Sjarifudin said he had made the request about two months ago and would raise the issue at the next monthly cabinet meeting early in June.

He said he had asked for a review of corn import tariff, but did not elaborate.

His comments came in response to earlier reports which said that many feed producers had recently opted for imported rather than domestic corn as raw material for their products.

Corn makes up about 60 percent of poultry feed.

Earlier reports said feed producers in West Java no longer bought hybrid corn from domestic farmers because its price had continued to rise since April.

Imports were said to be cheaper and to meet quality standards making it more reliable for feed producers.

According to Bandung's Pikiran Rakyat daily, feed manufacturers currently buy imported corn at Rp 416 (17 U.S. cents) a kilogram.

They buy domestic corn from village cooperatives at between Rp 365 and Rp 420 a kg -- a sharp increase since the beginning of April when it was only about Rp 380 a kg.

Village cooperatives currently buy corn from farmers at between Rp 330 and Rp 370 a kg.

Domestic hybrid corn is currently grown by farmers under partnership programs which also involve feed producers.

Officials at the Ministry of Agriculture have expressed concern over the situation.

They said it could affect corn-plantation partnership programs currently being developed in Central Java, East Java, South Sulawesi, West Nusa Tenggara and Lampung.

The government-designed partnership programs are expected to cover 1.2 million hectares by the end of the year.

Sjarifudin said yesterday he saw no need to impose penalties on feed producers that refused to use domestic corn.

"Our approach in these cases has always been a market-oriented one. Imposing penalties like that is not market-oriented management," he said.

Domestic corn production is expected to increase to 9.2 million tons this year, up from about 8.9 million tons last year.

Sjarifudin predicted earlier this year that hybrid corn crops would more than double in area to 1.2 million hectares later this year, from about 500,000 hectares, as a result of the corn- cultivation partnership program.

Indonesia imports about 1.3 million tons of corn annually, mainly hybrid corn to support domestic poultry feed production.

Demand for corn has increased sharply from 1.28 million tons in 1990 to about 3.51 million tons last year. It is expected to increase to 3.81 million tons this year and 4.08 million tons in 1998. (pwn)